zondag 28 november 2010

Stewardship: Curate a context to self-organize and master the reward schedule



Marketeers don't like to squander marketing dollars on people who have no intention of ever buying their product. That means marketeers want to know more and more about what makes each of us 'tick', our motivations, behavior, attitudes, and buying habits.

With the exponential increase of 'big data', companies can improve:
1. The efficiency of their marketing dollars
2. The personal relevance of their 'offerings'
3. The level of engagement of people with their 'offerings'

How? Use sensors and capture 24/7 what millions of people have done and carefully calibrate the rate, the nature, the type, the intensity of rewards.

The neurotransmitter associated with learning is called dopamine. We are beginning to be able to model mathematically dopamine levels in the brain.

This means that:
A. We can predict learning
B. We can predict enhanced engagement
C. We can identify the windows of time in which the learning is taking place at an enhanced level.

The biggest neurological 'engagement turn-on' for people is other people. It's not money, it's not being given cash, it's doing stuff with our peers, watching us, collaborating with us.

Individual engagement can be transformed to collective engagement, by applying the five psychological and neurological lessons learnt from measuring & observing people that play online games:
1. Allow people to set targets by setting calibrated targets, by using elements of uncertainty, by using these multiple targets, by using a grand, underlying reward and incentive system, by setting people up to collaborate in terms of groups, in terms of streets to collaborate and compete, to use these very sophisticated group and motivational mechanics we see.
2.Offer people the grand continuity of experience and personal investment.
3. Break things down into highly-calibrated small tasks. Use calculated randomness.
4. Reward effort consistently as everything fields together. Rewards could be calibrated precisely. Use the vast expertise of gaming systems.
5. Use the kind of group behaviors that evolve when people are at play together, these really quite unprecedentedly complex cooperative mechanisms.

Conslusion: Media companies that will survive are the ones that create and facilitate arenas for brands to connect with their customers on; companies that curate a context to self-organize and master the reward schedule by using their observations of millions of human hours and plowing that feedback into increasing engagement.

maandag 22 november 2010

Transmedia: Collaborative gaming + Open source + Cloud computing

We are in the middle of a very profound, long-term shift in how we do business. But we can't quantify it. We'd expect that markets would be able to come up with innovation to handle this shift in business practice, but it isn't happening.





zaterdag 20 november 2010

Web 2.0 summit 2010

Web 2.0 summit 2010 highlights:





donderdag 18 november 2010

Brain analytics will be revolutionary for marketing and (commercial) conversation

The latest scanning techniques allow us get to know more about the brain and abstract notions such as sense, belief and emotion. Neurotechnology - new tools for both understanding and influencing our brains - is now also being applied to marketing.

In the same way that Copernicus, Darwin, Freud and DNA changed the way we see the world, so will neurotechnology be disruptive for marketing. The latest scanning techniques allow us to find out which elements of advertising are most efficient for durable branding.

Information about the brain is the holy grail for marketing. We will ‘be able to look inside the brain and predict what consumers want’ and then ‘start selling consumer goods that are aimed directly at our receptive nervous system’. Research already showed that products that are highly appreciated activate the part of the brain that is also involved in self-identification. That alone could be used to influence consumer behavior.

Our conscience, our subjective perception of the world is the result of billions of neurons giving each other tiny electric shocks. Our brains are plastic masses that are continually moving and thus ever-changing. All our emotions are made up out of chemical processes.

People don't buy what you do; they buy why you do it. The goal is not to do business with everybody who needs what you have. The goal is to do business with people who believe what you believe.



It's all grounded in the tenets of biology. If you look at a cross-section of the human brain, looking from the top down, What you see is the human brain is actually broken into three major components.

1. Our newest brain, our homo sapien brain, our neocortex, corresponds with the "what" level. The neocortex is responsible for all of our rational and analytical thought and language.

2. The middle two sections make up our limbic brains. And our limbic brains are responsible for all of our feelings, like trust and loyalty. It's also responsible for all human behavior, all decision-making, and it has no capacity for language.

When we communicate from the outside in, people can understand vast amounts of complicated information like features and benefits and facts and figures. It just doesn't drive behavior. When we can communicate from the inside out, we're talking directly to the part of the brain that controls behavior, and then we allow people to rationalize it with the tangible things we say and do. This is where gut decisions come from. You know, sometimes you can give somebody all the facts and figures, and they say, "I know what all the facts and details say, but it just doesn't feel right." Why would we use that verb, it doesn't "feel" right? Because the part of the brain that controls decision-making, doesn't control language. And the best we can muster up is, "I don't know. It just doesn't feel right." Or sometimes you say you're leading with your heart, or you're leading with your soul. Well, I hate to break it to you, those aren't other body parts controlling your behavior. It's all happening here in you limbic brain, the part of the brain that controls decision-making and not language.

But if you don't know why you do what you do, and people respond to why you do what you do, then how you ever get people to buy something from you? The goal is not just to sell to people who need what you have; the goal is to sell to people who believe what you believe.

People don't buy what you do; they buy why you do it. And if you talk about what you believe, you will attract those who believe what you believe. But why is it important to attract those who believe what you believe? Something called the law of diffusion of innovation. The first two and a half percent of our population are our innovators. The next 13 and a half percent of our population are our early adopters. The next 34 percent are your early majority, your late majority and your laggards. The only reason these people buy touch tone phones is because you can't buy rotary phones anymore.

We all sit at various places at various times on this scale, but what the law of diffusion of innovation tells us is that if you want mass-market success or mass-market acceptance of an idea, you cannot have it until you achieve this tipping point between 15 and 18 percent market penetration. And then the system tips. And I love asking businesses, "What's your conversion on new business?" And they love to tell you, "Oh, it's about 10 percent," proudly. Well, you can trip over 10 percent of the customers. We all have about 10 percent who just "get it." That's how we describe them, right. That's like that gut feeling, "Oh, they just get it." The problem is: How do you find the ones that get it before you're doing business with them versus the ones who don't get it? So it's this here, this little gap, that you have to close, as Jeffrey Moore calls it, "crossing the chasm." Because, you see, the early majority will not try something until someone else has tried it first. And these guys, the innovators and the early adopters, they're comfortable making those gut decisions. They're more comfortable making those intuitive decisions that are driven by what they believe about the world and not just what product is available.



Belief is the natural state of things. It is the default option. We just believe. We believe all sorts of things. Belief is natural. Disbelief, skepticism, science, is not natural. It's more difficult. It's uncomfortable to not believe things. So like Fox Mulder on "X-Files," who wants to believe in UFOs? Well, we all do. And the reason for that is because we have a belief engine in our brains. Essentially, we are pattern-seeking primates. We connect the dots: A is connected to B; B is connected to C. And sometimes A really is connected to B. And that's called association learning.



We have the tendency to find meaningful patterns in both meaningful and meaningless noise. When we do this process, we make two types of errors. A Type I error, or false positive, is believing a pattern is real when it's not. Our second type of error is a false negative. A Type II error is not believing a pattern is real when it is.

Now the problem here is that 'patternicities' will occur whenever the cost of making a Type I error is less than the cost of making a Type II error. We have a pattern detection problem that is assessing the difference between a type one and a type two error is highly problematic, especially in split-second, life-and-death situations.

So the default position is just "believe all patterns are real. There was a natural selection for the propensity for our belief engines, our pattern-seeking brain processes, to always find meaningful patterns.

The propensity to find the patterns goes up when there's a lack of control.

Significantly more meaningful patterns were perceived on the right hemisphere, via the left visual field, than the left hemisphere. So if you present subjects the images such that it's going to end up on the right hemisphere instead of the left, then they're more likely to see patterns than if you put it on the left hemisphere. Our right hemisphere appears to be where a lot of this patternicity takes place.




Watch Gero Miesenboeck's FROM: 'If we record the activity of all neurons, we would understand the brain' TO 'If we control the activity of some neurons, we would learn much about the brain'.





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woensdag 17 november 2010

Finding an enduring SmartSweetSpot in the unfolding Marketing Eco System


For every media company, the digital future is not a destination...but a journey. A journey of finding the right answers to the right questions.

Some questions:
1. Which players in the (digital) Marketing Eco System do what you do better than you do?
2. Is your media media company leading of lagging in the ability to adapt?
3. How to anticipate on the moves of the 'big five' (Apple, Google, Facebook, Amazon and Microsoft)
4. How will your media company turn 'the end of advertising as we know it' into an opportunity?

5. Is the learning-loop of your media company keeping pace with the needed 'improvement' speed?
6. What does the rapid growth rate in on-demand video usage mean for your business?
7. Is your media company prepared for the next half decade of change?
8. What is your media company's 'secret sauce' to avoid commodization?
9. When do consumers/enterprises & incumbents/attackers need you?
10. Will these trends continue?

Some answers:
A. Look for opportunities to open up your business model to exploit the assets and capabilities of people outside your media company
B. Decide how your digital services can grow beyond just having a presence of the internet to being an active platform in the (mobile) digital Marketing Eco System
C. Perform a deep structural analysis of how to respond, and be pro-active in responding to changes of the magnitude that follow. Tactical responses and/or "Wait and see" approaches will be insufficient
D. Consider how the increasing amount of information and consumerization of technology fits with your mission; don't just follow the crowd.
E. Do not prevent risk but to build capacity to recover quickly from failures. Fail often. fail early. Learn from it.

dinsdag 16 november 2010

Next Generation Analytics

Increasing compute capabilities of computers - including mobile devices - along with improving connectivity are 'connecting the world of atoms and bits' and enabling a shift in how businesses support operational decisions.

What is happening, at this moment:
A. Extending built-in sensors
B. Improving the reliability of embedded sensors
C. Improving methods and techniques to read sensor data over long distances
D. Improving computer programs that interpret the sensor data well and quickly and turn the data into useful information for the carriers of the sensors

Meanwhile, the intelligence departments of media companies increasingly get the possibility:
1. To generate, store, analyse and make connections between billions of statistical data and the causes of human behavior. Due to this convergence, more is becoming known about the mechanisms of media-, orientation- and buying-behavior.
2. Of using functional MRI scanners, to explore what happens in the living brain. Neurotechnology - new tools for both understanding and influencing our brains including brain imaging - is now also becoming applied to advertising and marketing.
3. To run simulations or models to predict the future outcome, rather than to simply provide backward looking data about past interactions, and
4. To do these predictions in real-time to support each individual business action.

The market leading media companies of tomorrow will be the ones that find innovative ways to harness their vast amounts of data to gain competitive advantages; companies that use statistical analysis to map patterns of consumer activity, rather than intuiting it from what they think customers are doing. These media companies conduct trend analysis by forecasting and extrapolating, based on varied assumptions, allowing them to anticipate needed business model, inventory, financing and capacity, so they can provide better, more relevant (mobile digital) services at lower costs.

While this may require significant changes to existing operational and business intelligence infrastructure, the potential exists to unlock significant improvements in experienced value for people (providers of the data), improvements in personal relevance (right service, at the right time and place), in business results and other success rates.

In the unfolding Marketing Eco System, Next Generation Analytics will transform how humans live, work and play.


David de Boer, Manager Marketing Intelligence Sales

zondag 14 november 2010

Transmedia: The art of unbundled (commercial) conversations

The 'advertising' and 'branded content' of tomorrow will contain distributed links of those who pay to be there. Technology will work on our behalf to bring those 'offerings' our way, because we've asked for them.

Doc Searls' Project VRM, where consumers signal businesses about wants and needs instead of the other way around, will be a form of distributed media with links.





With classifieds like Marktplaats, each item has a link, and those could be aggregated elsewhere and passed around, depending on the need specified in a user's 'signal.' Whoever pays the most gets first in line. The money will be made for matching consumer needs/signals with 'offerings' (business goods and services). This real-time match-making is something the digital Marketing Eco System can handle very efficiently.




Commerce-generating applications will make it all happen, whether it's via a closed system like Twitter or an API at the application layer of the digital Marketing Eco System itself.

That's just one possibility of moving 'commercial conversation' into the digital Marketing Eco System and the stream. Other commercial formats will certainly be developed, but the possibilities of unbundled 'advertising' are limitless, all made possible by the portable link.

Media companies framing their added value for 'companies, formerly known as advertisers' into bundled advertising concepts limit their range of possible solutions. And, thus, limit their potential added value while exploring new business models.

dinsdag 9 november 2010

Shape matters more than size

Due to fundamental long-term changes in consumer (media consumption & purchase) behavior, media companies are no longer content providers...they are in the conversation business.

Media companies - staffed and structured to be content providers in a classical Media Value Chain - need to come to terms with what they are becoming. In order to succeed:

1. Doing nothing is not an option
Media companies need to find a new Smart (a new mash-up of capabilities and business model innovation across their network) & Sustainable Sweet Spot within the unfolding Marketing Eco System.

2. Resizing is not enough, shape matters more than size
The cost reduction initiatives to keep traditional media companies commercially viable will remain important (shareholders focus on stripping out cost to maintain earnings per share), but will not suffice. Slimmed-down media companies will have to evolve further than they have done to date and need to change shape (long-term focus) as well as size (short-term focus). Key will be the ability to reshape traditional business models and organisational structures to best exploit the opportunities that ongoing technological development and digital transformation offers. A strategic approach, taking account of structure, governance and culture, identifies a more sustainable model for operating in the unfolding Marketing Eco System.



Deeply embedded ways of working need to be changed. Data analytics and real-time consumer insight have not traditionally been core competencies of media companies, while data analytics will become fundamental to any content-based organisation.









Conclusion: Traditional media companies need a very different kind of skill set to generate the new revenue streams that are going to be very important going forward. The most succesfull status-quo-challenger, the most agile skill-set-winner of tomorrow, takes it all.

Do you want to know more about Sanoma's beliefs on the future playing field of media companies? Watch this!

David de Boer, Manager Marketing Intelligence Sales, Sanoma

(source: Deloitte/Spencer Stuart, Ed Shedd & Grant Duncan, "Why agility must follow austerity in the new digital age", june 2010)

About the author

Manager Marketing Intelligence Sales, Sanoma Media Netherlands david.deboer@sanomamedia.nl www.twitter.com/daviddeboer